The U.S. economy reported its worst quarterly decline in modern history during the COVID-19 pandemic, with gross domestic product shrinking at an annual rate of 31.4% in the second quarter. The economy bounced back in the third quarter, but efforts to contain the virus’s spread throughout 2020 still resulted in a 3.5% annual economic contraction in the United States.
Arriving on the heels of a historic period of growth, COVID-19 brought about a decline in gross domestic product in every state in the country. However, no two state economies are alike, and partially as a result, some states were hit far harder than others.
Michigan is one of only eight states to report an economic decline greater than 5% in 2020. Economic output in the state fell by 5.4% from $471.6 billion in 2019 to $446.2 billion in 2020. Manufacturing was the largest drag on growth, with the sector’s output shrinking by 7.5% and detracting a net 1.4 percentage points from GDP.
Employment in Michigan’s manufacturing sector fell by 11% in 2020, more than double the sector’s 5% employment decline nationwide. Partially as a result, the number of people working in Michigan fell by 9.2% in 2020, well above the 5.8% national workforce reduction in 2020. Still, Michigan’s 4.9% unemployment rate remains considerably lower than the 6.1% U.S. rate.
States are ranked based on the percentage change in real GDP from 2019 to 2020. Data on GDP and industry-specific real GDP came from the BEA. Data on average annual employment and the seasonally adjusted monthly unemployment rate each came from the Bureau of Labor Statistics.
|Rank||State||Change in GDP, 2020 (%)||April 2021 unemployment (%)||Change in nonfarm employment, 2020 (%)|
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